Abolins v. Santas

Appeal
from the Chancery Court for Davidson County No. 15-1315-II
William E. Young, Chancellor

This
appeal concerns an order to set aside a default judgment.
Kristina Abolins and Christopher Heath Hawkins
("Plaintiffs") sued Frank Santas
("Santas"), doing business as Gunner Inc., and Alta
Horizon, Inc. ("Defendants, " collectively),
asserting a number of causes of action arising out of
Defendants' work on a renovation project at
Plaintiffs' home. After several months with no responsive
filing from Defendants, Plaintiffs moved for default
judgment. The Chancery Court for Davidson County ("the
Trial Court") granted Plaintiffs' motion for default
judgment. Defendants filed a motion to set aside default
judgment, raising certain defenses and taking issue with
service of process. The Trial Court entered an order granting
the motion to set aside on the condition that Defendants pay
Plaintiffs' attorney's fees and expenses. Defendants
did not pay, and instead appealed to this Court. We find no
abuse of discretion by the Trial Court. We, therefore, affirm
the judgment of the Trial Court.

In
November 2015, Plaintiffs sued Defendants in the Trial Court
seeking damages arising from an alleged breach of contract,
conversion, violation of the Tennessee Consumer Protection
Act ("TCPA"), and other causes of action.
Plaintiffs alleged they had hired Defendants to perform a
home renovation project which, according to Plaintiffs, never
was completed satisfactorily by Defendants.

Plaintiffs
attempted to serve Santas individually and as managing agent
of Alta Horizon by means of the Dickson County Sheriff's
Office. Process was returned with the notation "avoiding
service" entered. Plaintiffs then hired private process
servers to serve Defendants. According to affidavits by
process servers Harold Loux and Kevin Trick, Defendants were
served on February 23, 2016. The summons return was
late-filed in December 2016.

On
March 31, 2016, Plaintiffs' counsel, Jennifer Ghanem
("Ghanem"), spoke with Defendants' counsel,
Charles Friddell ("Friddell"), concerning the case.
Ghanem emailed Friddell a copy of Plaintiffs' complaint.
On April 1, 2016, Friddell sent a letter to Ghanem in which
he stated that he was not authorized to accept service on
behalf of Defendants. On April 19, 2016, Friddell informed
Ghanem by email that he would file a motion to dismiss.
However, no motion to dismiss was filed at this stage.
Friddell did not file an appearance on behalf of Defendants
until the filing of Defendants' motion to set aside
default judgment.

On May
31, 2016, Plaintiffs filed a motion for default judgment. By
July 2016 order, the Trial Court granted default judgment in
favor of Plaintiffs for a total of $166, 840.98, which
included a trebling under the TCPA of $55, 613.66 in
compensatory damages. The Trial Court stated in this order
regarding the service of process that: "Defendants did
not respond to process or participate in the litigation, and
a Motion for Entry of Default was filed by the Plaintiffs, to
which no response was filed as required by Rule 55.01 of the
Tenn. R. Civ. Pro."

In
October 2016, Defendants filed their motion to set aside
default judgment pursuant to Tenn. R. Civ. P. 55.02 and
60.02. Defendants also filed a motion to dismiss. In their
memorandum in support of their motion to set aside default
judgment, Defendants asserted the following with respect to
what they alleged was lack of notice and improper service of
process:

The Defendants Motion under Rule 60.02 (1) for mistake,
inadvertence, surprise or excusable neglect would show unto
the Court the Sworn Affidavit of Frank Santas, the
Declaration of Counsel, Charles J. Friddell and the record as
reflected in the case file.

The Affidavit of Frank Santas clearly shows that he was
served with two papers on February 9th, 2016 which are the
two Summons as prepared and issued by this Court. However,
the Affidavit clearly states that no Complaint was attached
to either of the Summons as required by the law to
effectively serve a Defendant in this cause. The Affidavit
further shows that he brought the two Summons to Charles J.
Friddell who he directed to write a letter informing the
Plaintiffs counsel that the Service of Process was improperly
handled. The Declaration of Counsel as submitted by Charles
J. Friddell clearly shows that a letter was directed to
Plaintiffs counsel outlining the objection to the Service of
Process by the private process service.

Further, the Statement of Counsel clearly show e-mail
correspondence with Plaintiff's counsel outlining the
irregularities and the fact that Gunner, Inc. while
previously Administratively Dissolved in August of 2015 was
reinstated on January 26, 2016 and that Charles J. Friddell
and agreed to accept Service of Process for Gunner, Inc. from
Plaintiff's counsel. Curiously, there is nothing in the
Court record with respect to any representation or notices of
the Motion for Default, the Notice of Default Hearing, or the
Order as granted in this case.

Further, the Declaration of Counsel as submitted by Charles
J. Friddell shows that he has received no correspondence
other than the letter and e-mails Ms. Ghanem, Plaintiff's
counsel [sic]. Neither the Motion nor the Notice of Hearing
nor the proposed Final Order was submitted to or sent as a
courtesy to Charles J. Friddell, Attorney.

The Affidavit of Frank Santas also states that due to his
turning the Summons over to Mr. Friddell, his attorney, that
he felt this matter was being handled by Mr. Friddell and did
not receive the correspondence or mail sent from the
Plaintiff's counsel's office.

On October 21st, 2016 Frank Santas received from the Chancery
Court Clerk and Master's Office a Bill of Cost and
immediately called Charles Friddell to find out what the
status of this case was. On October 23rd, 2016 Charles J.
Friddell obtained copies of the Pleadings filed in this case
after April, 2016 and was advised for the first time that a
Judgment, including damages assessed of $55, 613.66 had since
been entered along with a Judgment for treble damages of
$166, 840.98.

***

Defendants further would show to the Court, pursuant to Rule
60.02(3) that the entry of a Judgment is void as contrary to
the laws of the State of Tennessee. Plaintiffs did not
properly serve the Defendants as required by Rule 4.04(1) and
Rule 4.04(4) of the Tennessee Rules of Civil Procedure.
Plaintiffs did not serve a copy of the Complaint along with
the two summons.

The
Trial Court conducted a hearing on the two motions in
November 2016. The Trial Court ruled that it would grant
Defendants' motion to set aside default judgment on the
condition that Defendants pay Plaintiffs' attorney's
fees and costs. Defendants filed a motion to alter or amend
judgment, in which they articulated their position in part as
follows:

Defendants have incurred substantial attorney fees and costs
in their Motion to Set Aside, appearance and review of other
matters. Defendants have shown the Court by other averments
that substantially the amount of fees and delays in this
matter could have been minimized had Plaintiffs counsel
followed the rules and given notice to Mr. Friddell that she
was filing for a Default Judgment in this matter. Defendants
maintain that the imposition of fees as a sanction in this
regard is inequitable.

***

The Defendants have by sworn affidavit stated that they did
not receive the Motion for Default Judgment nor the Order of
Default. Plaintiffs' counsel relies on the Certificate of
Service contained in those documents as filed.

The Certificate of Service by Jennifer S. Ghanem to Alta
Horizon, Inc. was improperly addressed. The zip code for Bon
Aqua, Tennessee is 37025. The Plaintiffs counsel mailed the
letter for Alta Horizon, Inc. to 37205 which is the zip code
for Belle Meade. This clearly rebuts the presumption that the
Certificate of Service to Alta Horizon, Inc. is presumed to
be served. It further may explain why the Defendants did not
receive such notice.

The certificate of service required by Tenn. R. Civ. P. 5.03
is prima facia evidence that the document was served in the
manner described in the certificate and raises a rebuttable
presumption that it was received by the person to whom it was
sent. The defendants contend that the failure of Plaintiffs
counsel to properly and timely file documents with the Court
impeaches the certificates as signed and rebuts the
presumption. The defendants further contend that the failure
of ...

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